China’s influence on the world stage has been steadily increasing, but the country’s new leadership now faces a host of perplexing problems. Miyamoto Yūji, former Japanese ambassador to China, examines some of the challenges facing the Xi Jinping administration.

Following the Eighteenth National Congress of the Communist Party of China in November 2012, Xi Jinping became general secretary of the CPC and chairman of the party’s Central Military Commission. And at the National People’s Congress in March 2013, he was elected president of the People’s Republic of China. These moves mark the establishment of a new administration headed by Xi, who now holds the top posts in the government, the party, and the military command.

China is a country under the one-party rule of the CPC. With the spread of the Internet, the party and the government have become much more subject to the influence of popular sentiment. Yet this has not changed the fact that the future of China will be determined by the direction taken by the CPC.

What will be the basic thinking underlying Xi’s new administration, and what sort of policies will it pursue? And to what extent will it be able to realize its aims? With China now emerging as a new superpower, getting to the heart of these questions will be essential to clarifying the outlook not just for Asia but for the world at large.

Taking Charge of a Corrupt Military Establishment

The personnel changes in the People’s Liberation Army that were announced in October 2012 surprised observers with their unprecedented scope. And in another break with precedent, Xi Jinping assumed the chair of the Central Military Commission at the same time as he became general secretary of the party in November, instead of allowing his predecessor Hu Jintao to remain in that post. Looking back now, we can see that Xi had by that point already put the People’s Liberation Army firmly under his own control, an accomplishment reflecting the close ties he has had with the military.

Xi Jinping’s father, Xi Zhongxun (1913–2002), a veteran revolutionary who rose to the post of vice-premier, built up a strong network of personal connections in the PLA, particularly among personnel from his home province of Shaanxi, and Xi Jinping inherited this network. The fact that the younger Xi was able to work as the secretary to Geng Biao (1909–2000), one of the senior leaders of the PLA, presumably also helped him build up his ties with the military.

Perusing the history of the CPC reveals that whenever the party has faced the danger of an internal split, the PLA has stepped in to calm down the situation. The change in leadership that took place in the autumn of 2012 marks the first time for a new top leader to be selected without having been designated well in advance by the previous leader as his heir. This change of government took place amid a bitter power struggle in the higher echelons of the CPC, as evidenced by the scandal surrounding the fall from power of Bo Xilai. This was the reason why the first step for Xi was to establish his hold over the PLA, using that position to play the role of a conciliator who could restore stability and a sense of unity within the party.

Xi achieved a considerable degree of success in taking control of the PLA. It is an organization that has grown extremely corrupt, and the general public views it as such. But Xi can probably maintain the upper hand by using his authority over personnel decisions and taking steps against corruption in the military. Meanwhile, though, his closeness to the PLA raises the likelihood that his actions will be governed by the logic of that organization, that is to say, the logic of national security.

Can the New Leadership Cope with Rapid Change?

Having established a grip on the PLA, Xi also seems to be firming up his leadership position with the CPC. But the China that he now governs is facing a number of difficult issues, and these issues are becoming even more serious. The challenges facing the CPC are enormous.

The greatest challenge is that presented by the fast pace of change. The system of governance is failing to keep up with this pace and is in fact losing ground in terms of conceptual ability, state structure, and the training of government administrators and leaders. As a result, the CPC is confronting difficult social, political, diplomatic, and security-related problems that are only getting worse. China has reached a stage where it is no longer enough to simply follow the sayings of Deng Xiaoping (1904–97), the leader who launched the economic liberalization process.

The great strength of the CPC has been its ability to accurately size up the problems it confronts, formulate policy solutions, and then implement those policies. But now doubts are emerging about whether it still has this ability. The CPC has no choice but to thoroughly reform itself in a whole range of areas. The question is whether it is capable of doing so.

The forces that are blocking the way to reform are those of the groups with vested interests in the CPC-led government, military, and state-run enterprises. They are growing in strength year by year, but unless the party can break their grip, it will have no future.

The next test for the CPC—and this is a perennial problem—concerns the extent to which the policies of the central government are implemented at the local level. This is, in other words, the question of the relationship between the central and regional governments. This problem involves establishing frontline organizations that will faithfully execute administrative tasks for the party and the government; solving it will require a tremendous amount of energy.

Losing Sight of Values

The final test for China stems from the fact that Chinese society and the state have lost their old principles and values and have yet to find new ideological and intellectual foundations for domestic administration and foreign policy.

This is quite a serious situation. The CPC is aware of the problem but does not know how to deal with it—or at least cannot form a consensus drawing together the various opinions on what should be done.

The Great Cultural Revolution wreaked havoc not only on China’s traditional values but also on the founding spirit of the People’s Republic based on the ideology of socialism/communism. Deng Xiaoping came up with a new spirit for leading the party and the nation based on the idea of pursuing material affluence while leaving socialism/communism in place as a future goal. But the members of China’s current generation have made the pursuit of material well-being the be-all and end-all of life. The idea was that prosperity would make people happy. In fact, however, it is resulting in the exacerbation of social contradictions and rising dissatisfaction.

Xi Jinping seems to be searching for a new ideology, as reflected in his closing remarks to the National People’s Congress, where he spoke of striving to “achieve the Chinese dream of great rejuvenation of the Chinese nation.” The specifics of this call are not yet clear, but given the spirit of the times, it could easily incorporate nationalism and superpower ambitions, giving rise to a hard-line foreign policy. Particularly when it faces tough going on the domestic front, the administration can be expected to direct attention to external issues.

The Need to Lend a Helping Hand

It is clear that the Xi administration is from the outset facing domestic and international problems far more difficult than those of the years when Hu Jintao was at the helm (2003–13). In the period to come, domestic and external issues will be rocking China in tandem. And the results will affect not only Asia but the whole world. This is because China has become a major country with great global influence.

China’s only hope for the future is that Xi can use his grip on power to confront the tough problems the nation faces and implement steadfast reforms. This is because the governmental system centered on CPC one-party rule does not allow for any other way to effectively deal with problems. But there is no guarantee that Xi will succeed.

The international community, particularly Japan and the United States, needs to be clearly aware of China’s obsession with the idea that the United States is seeking to encircle and destroy it, a mentality grounded in the trauma of its history and in its view of power politics—and, based on that awareness, strive to assist China in making its difficult transition as smooth as possible.

We are no longer in an era where the military power of individual states can resolve global problems. It must be brought home to the foreign-policy hard-liners within China that relying on force will only backfire and not result in solutions.

At the same time, other nations must not neglect the perspective of cooperating with China’s domestic reforms. This cooperation is essential given how fraught with difficulties the reform process will be. The outcome of the reforms will have a tremendous impact on the world as a whole—the world in which we are living.

Chairman of the Miyamoto Institute of Asian Research, vice-president of the Japan-China Friendship Center, and chairman of the Japan-China Relations Academy of Japan. Joined the Ministry of Foreign Affairs in 1969. His diplomatic postings included serving as consul general in Atlanta and as ambassador to Myanmar. Was ambassador to China 2006–10. His published works include Kore kara, Chūgoku to dō tsukiau ka? (Moving Forward, How Should We Engage with China?) and Gekihen Myanmā o yomitoku (Deciphering a Radically Changing Myanmar).